Fasb Codification System

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FASB Codification System The Financial Accounting Standards Board (FASB) has created an accounting standard Codification System to assist people in various accounting functions. According to FASB.org, “The Codification is the single source of authoritative nongovernmental U.S. generally accepted accounting principles (GAAP).” The site offers information and help with a wide variety of accounting functions such as the presentation of financial statements, and how to record assets, liabilities, equity, revenue, and expenses. The creation of the Codification was done over five years and involved more than 200 people from multiple entities and is effective for interim and annual periods ending after September 15, 2009. There are several purposes for the creation of the FASB Codification System. One such goal was to simplify user access by codifying all authoritative U.S. GAAP in one location. Anyone who needs to know the proper procedures or rules that apply to the accounting practices need only to look to the Codification System for current and complete standards. This was another goal of the FASB which was to ensure that the codified content accurately represented authoritative U.S. GAAP as of July 1, 2009 and also that the research system is up to date for the released results of standard setting activities. By offering the Codification it was expected to reduce the amount of time and effort required to solve an accounting research issue. It also reduces the users risk since the presentation of information is complete, up to date, and simple to use (FASB.org, 2013). There are eight content areas in the FASB Codification system. The first is presentation which includes items such as the how financial statements are to be presented, the standards for the creation of balance sheets, income statements, statement of cash flows, notes to the financial statements,

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